New Manufactured Home Community in North Hollywood
A new community called Hollywood Backlot Homes leveraged federal Opportunity Zone funding to offer single to three-bedroom homes for residents to get “the neighborhood you’re looking for at the price you want”.
Opportunity Zones have been in existence since April 9, 2018. They allow investors and developers in any of the 8,700 designated areas across the country to defer capital gains and net 1231 gains through 2026. Deferred gains must be put in a Qualified Opportunity Fund and reinvested in the property within a reasonable amount of time.
Additionally, Opportunity Zones offer a 10% to 15% federal tax exemption on those gains if the developer or investor maintains ownership of the property for three to five years, respectively.
Hollywood Backlot Homes is developed in a zone in North Hollywood, one of 879 “distressed” areas within California alone. Multi-Opp, LLC, the development company for the property, received a $36 million bridge loan from 3650 REIT for the acquisition and redevelopment of the 10-acre manufactured home community aimed at fulfilling the demand for attainable housing in Los Angeles.
There are Opportunity Zones in each of the 50 U.S. states, as well as in Washington, D.C. and U.S. territories. Each can nominate underutilized or distressed tracts of land for the federal designation. An Opportunity Zone map with property listings and frequently asked questions can be found on the IRS website.
Community Named to Celebrate Nearby Film Studios
North Hollywood’s association with the film studios and production inspired the “backlot” name. Hollywood Backlot Homes is a rental community with 140 HUD-code homes marketed as luxury apartments. Amenities include a gated entry, outdoor pool, clubhouse, gym, gaming center, dog run, grill pavilion, and outdoor lounge.
Monthly rental pricing for the homes ranges from $1,800 to $2,495.
The community’s attainable price points relative to the area will allow renters to enjoy the privacy and extra space of a detached single-family home. The community currently is in development with new amenities and homes.
Multi-Opp, LLC Co-founder Mauricio Oberfeld said the all rental concept in an identified zone is the perfect match.
“We believe this project embodies the true goal of the Opportunity Zone legislation, to encourage investment, housing, and job creation,” Oberfeld said. “When we discovered the Hollywood Backlot Homes property, we immediately realized it would be the perfect property to launch our detached multifamily rental concept, where renters can enjoy all the benefits of a class A multifamily asset while living in a detached residential environment with attainable rents.”
The U.S. Economic Development Administration and Opportunity Zones
The EDA offers funding through competitive grants to foster job creation and attract private investment to support development in economically distressed areas of the United States.
The administration encourages its economic development partners to think of Opportunity Zone investment as “a new arrow in the quiver” to not only enhance ROI for business interests, but also to encourage the public/private partnerships needed to drive private investment to distressed areas.
Emphasis on Opportunity
- In FY18, EDA issued a Notice of Funding Opportunity that made Opportunity Zones eligible for funding from EDA, through its special needs category, even if the area would not meet EDA’s economic distress criteria.
- In June 2019, EDA added Opportunity Zones as one of its five Investment Priorities to help significantly increase the number of catalytic Opportunity Zone-related projects we can fund.
- As part of the White House Opportunity and Revitalization Council (WHORC), EDA provides an overview of our role in the initiative at Opportunity Zone roundtables that are bringing together local elected officials, business leaders, community groups, and others across the country.